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Option Recap - April 2018

Option Activity Recap - April 2018

Whenever I was laid off back in April 2016 I had a fairly sizable amount of cash in my 401k that I was set to rollover into an IRA. With a large amount of cash on hand I wanted to explore a more active approach to generating income from my portfolio as opposed to the rather mundane dividend growth investing. Don't get me wrong I love dividend growth investing, but I also want to look for ways to get to financial independence sooner rather than later. So I embarked on a strategy to trade options in order to generate a higher income from the same capital base. There's more risk involved, especially if you venture into underlyings that you aren't willing to own, but the income generation can be quite substantial. For the bulk of my option trading capital I stick with fairly simple things such as selling puts or calls and don't venture into the more complicated strategies that are out there. The results for 2017 were fairly solid and encouraging, although the one way move higher in the markets meant that I missed out on potential gains as opposed to just buying the market.This year started off strong with over $6,700 of realized profits through the end of March; however, April was a much different story. Unfortunately April turned out to have net losses primarily due to getting caught in a few moves that I just couldn't get out of the way of. Luckily though the losses were very manageable at just $63.21. It was definitely a big drop off from the first three months, but you won't hear me complaining about very tiny losses from time to time. Through the end of April my net profits, before tax, from option trading comes to $6,640.12.

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Trade RecapI've been super busy with work and so my action level with both writing and interacting with everyone has suffered. Sadly that's a necessary side effect that comes with the territory of having a job.Due to that and since May is already nearing it's end I'll be skipping the trade recap for April, but May's update will have a trade that went oh so wrong and then oh so right thanks to management, time and the markets recovering. So stay tuned!ConclusionOptions trading has been a fun undertaking and something I will continue to explore going forward. My desire/attention for it might wane since it does require a lot more activity than just passive dividend growth investing, but the results so far are promising as a way to generate more return via option premium than from the dividends alone.Going forward I plan to do a quick recap of each months option activity and also highlight one trade, winner or loser, that was closed in that month. If you'd like to check out my option trades in between updates feel free to check out my Option Summary page that I update usually on a daily basis.Also if you're interested in options trading or have any questions feel free to leave a comment or shoot me an email.Do you utilize an option strategy on top of your core dividend growth investing?

Comments

Hi JC. I'm looking forward to see the highlighted trades... sounds like you've got a good story to tell next month, too. I'm sure April was just a bump in the road on your superhighway to options income.

I got way behind on my tracking during April and just recently got all caught up with everything through May too. May's highlighted trade wasn't anything special and wasn't even a hugely profitable trade, but patience and position management all played a role in making it profitable over time.

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